SECTION 1. PURPOSE AND CHANGES FROM
REV. PROC. 2007-37

.01 The purpose of this revenue procedure is to set forth
the procedure by which the sponsor of a defined benefit plan, other
than a multiemployer plan, may request and obtain approval for the
use of plan-specific substitute mortality tables in accordance with
§ 430(h)(3)(C) of the Internal Revenue Code (Code) and § 303(h)(3)(C)
of the Employee Retirement Income Security Act of 1974, as amended
(ERISA).

.02 This revenue procedure is an update of Rev. Proc. 2007-37,
2007-25 I.R.B. 1433. Rev. Proc. 2007-37 was based on the proposed
regulations issued under § 430(h)(3)(C) of the Code and
§ 303(h)(3)(C) of ERISA published in the Federal Register
on May 29, 2007, at 72 FR 29456 [REG-143601-06, 2007-24 I.R.B. 1398]
(“proposed regulations”). Final regulations under § 430(h)(3)(C)
were published in § 1.430(h)(3)-2 in the Federal Register
on July 31, 2008, at 73 FR 44632 [T.D. 9419, 2008-40 I.R.B. 790]
(“regulations” or “final regulations”). This
revenue procedure reflects the provisions of the final regulations,
and includes the following changes from Rev. Proc. 2007-37:

(1) The requirements in subsection 2.02 were updated to reflect
the ability to use a period of up to 5 years (or such longer period
as the Commissioner may permit in future guidance) for the Experience
Study Period, and subsection 10.01 was revised to clarify that the
Experience Study Period used to develop the unadjusted base tables
must coincide with the Experience Study Period used to demonstrate
credible mortality experience.

(2) Subsections 4.01 and 5.06 were updated to reflect the
extension of the deadline for submitting requests to October 1, 2008,
for substitute mortality tables to be used effective for plan years
beginning in 2009.

(3) The definition of the Base Year in subsection 5.03
was updated to reflect the revised definition in § 1.430(h)(3)-2(c)(2)(iii)
of the final regulations.

(4) A new subsection 7.03 was inserted (and the former subsection
7.03 was renumbered as subsection 7.04) to permit plans within a Permissive
Group to use different Experience Study Periods (subject to specified
conditions) if the plans have different plan years.

(5) Subsection 9.01 was revised to reflect the requirement
in § 1.430(h)(3)-2(d)(1) of the final regulations to increase
the length of the period used to demonstrate lack of credible mortality
experience if the Experience Study Period is longer than 4 years.

(6) A new subsection 9.06 was inserted to provide guidance
for demonstrating lack of credible mortality experience when the Experience
Study Period is developed using the approach in new subsection 7.03.

(7) A new subsection 9.07 was inserted to permit alternative
means of demonstrating lack of credible mortality experience.

(8) One set of sample annuity values was eliminated with
respect to nonannuitant mortality tables and adjustments were made
to the date of birth used for the annuity values reported in subsection
13.03.

(9) References throughout the revenue procedure to “newly
acquired” plans were changed to “newly affiliated”
plans to conform to the language in the final regulations.

SECTION 2. BACKGROUND INFORMATION

.01 Section 412 of the Code provides minimum funding requirements
for defined benefit pension plans. Section 430, which was added by
the Pension Protection Act of 2006, Pub. L. No. 109-280, 120 Stat.
780 (“PPA ’06”), specifies the minimum funding requirements
for defined benefit plans other than multiemployer plans pursuant
to § 412 and is generally effective for plan years beginning
on or after January 1, 2008. Section 430(h)(3)(A) sets forth rules
regarding the use of generally applicable mortality tables for purposes
of § 430. Section 430(h)(3)(C) and § 303(h)(3)(C)
of ERISA provide that the Secretary of the Treasury may approve substitute
mortality tables to be used in determining any present value or making
any computation under those sections for a period not to exceed ten
years. Mortality tables meet the requirements for substitute mortality
tables if the pension plan has a sufficient number of plan participants
and the plan has been maintained for a sufficient period of time in
order to have credible mortality experience, and such tables reflect
the actual experience of the plan and projected trends in general
mortality experience of participants in pension plans. Except as
provided by the Secretary, a plan sponsor cannot use substitute mortality
tables for any plan unless substitute mortality tables are established
and used for each other plan subject to § 430 of the Code
that is maintained by the plan sponsor and the plan sponsor’s
controlled group.

.02 Section 1.430(h)(3)-1 of the Income Tax Regulations,
which sets forth rules regarding the use of generally applicable mortality
tables for purposes of § 430, and § 1.430(h)(3)-2,
which sets forth rules for the use of substitute mortality tables
under § 430(h)(3)(C), were published in the Federal Register
in proposed form on May 29, 2007. Rev. Proc. 2007-37 was issued to
provide procedures under which sponsors of eligible plans could request
and obtain approval for plan-specific mortality tables in accordance
with proposed regulation § 1.430(h)(3)-2. Final regulations
under § 430(h)(3)(C) were published in § 1.430(h)(3)-2
in the Federal Register on July 31, 2008. This Rev. Proc. 2008-62
updates the procedures outlined in Rev. Proc. 2007-37 to reflect the
changes in the final regulations.

Under both the proposed and final regulations, substitute mortality
tables must reflect the actual mortality experience of the pension
plan maintained by the plan sponsor for which the tables are to be
used and that mortality experience must be credible. Separate mortality
tables must be established for each gender under the plan, and a substitute
mortality table is permitted to be established for a gender only if
the plan has credible mortality experience with respect to that gender.
If the mortality experience for one gender is credible but the mortality
experience for the other gender is not credible, then the substitute
mortality tables are used for the gender that has credible mortality
experience, and the mortality tables under § 1.430(h)(3)-1
are used for the gender that does not have credible mortality experience.
If separate mortality tables under § 430(h)(3)(D) are used
for certain disabled individuals under a plan, then those individuals
are disregarded for all purposes with respect to substitute mortality
tables under § 430(h)(3)(C). Thus, if the mortality tables
under § 430(h)(3)(D) are used for certain disabled individuals
under a plan, mortality experience with respect to those individuals
must be excluded in determining mortality rates for substitute mortality
tables with respect to a plan.

Under the proposed regulations, a substitute mortality table
would be based on credible mortality experience for a gender within
a plan if and only if the mortality experience is based on at least
1,000 deaths within that gender over the period covered by the experience
study. The experience study would be based on mortality experience
data over a 2, 3, or 4-consecutive year period, the last day of which
must be less than 3 years before the first day of the first plan year
for which the substitute mortality tables are to apply. The final
regulations retain the above provisions, except that the maximum period
of the experience study is extended to a 5-consecutive year period.
In addition, the final regulations provide that the Commissioner
may allow further extensions of the maximum experience study period
in future guidance.

Development of a substitute mortality table under the regulations
requires creation of a base table (Base Table) and identification
of a base year (Base Year), which are then used to determine generational
substitute mortality tables. The Base Table must be developed from
a study of the mortality experience of the plan using amounts-weighted
data. The regulations also set forth rules regarding development
of amounts-weighted mortality rates for an age and the determination
of the Base Year. The regulations provide that amounts-weighted mortality
rates may be derived from amounts-weighted mortality rates for age
groups.

The regulations provide that Base Tables may be constructed
either directly through graduation of amounts-weighted mortality rates
or indirectly by applying a level percentage to tables prescribed
by § 430(h)(3)(A), provided that the resulting tables sufficiently
reflect the plan’s mortality experience. The Service may permit
the construction of Base Tables through application of a level percentage
to other recognized mortality tables, applying similar standards to
ensure that the resulting tables are sufficiently reflective of the
plan’s mortality experience.

The final regulations provide that a plan sponsor cannot use
substitute mortality tables for any plan for a plan year unless substitute
mortality tables are established and used for each other plan subject
to § 430 that is maintained by the plan sponsor and the
plan sponsor’s controlled group for that plan year (or, for
plans with different plan years, a portion of that plan year). Under
the regulations, the use of substitute mortality tables for one plan
would not be prohibited merely because another plan maintained by
the plan sponsor (or by a member of the plan sponsor’s controlled
group) cannot use substitute mortality tables because neither the
males nor the females under that other plan have credible mortality
experience for a plan year. Thus, if a sponsor’s controlled
group maintains two pension plans subject to § 430, each
of which has credible mortality experience for at least one gender,
then either both plans must obtain approval from the Service to use
substitute mortality tables or neither plan may use substitute mortality
tables. By contrast, if, for one of those plans, neither males nor
females have credible mortality experience, then the plan without
credible mortality experience will not interfere with the ability
of the plan with credible mortality experience to use substitute mortality
tables.

SECTION 3. GENERAL ADMINISTRATIVE PROCEDURES

.01 Compliance with Regulations. Requests
submitted on or after December 1, 2008, must satisfy the requirements
of final regulation § 1.430(h)(3)-2 and this Rev. Proc.
2008-62. Requests submitted before December 1, 2008, may either satisfy
those requirements or, alternatively, may satisfy the requirements
of proposed regulation § 1.430(h)(3)-2 and Rev. Proc. 2007-37.

.02 Submission. Requests for the use
of substitute mortality tables must be submitted to:

The user fee required by paragraph (10) of subsection 6.01 of
Rev. Proc. 2008-8, 2008-1 I.R.B. 233, or its successors, must be sent
with such requests.

.03 Necessary Procedural Documents.
A request will not be considered unless it complies with paragraphs
(1) through (3) of this subsection 3.03, below.

(1) The request (and any subsequently provided additional
information) must be signed by the employer maintaining the plan(s)
(the “applicant”) or an authorized representative of the
applicant who must be identified in (a), (b), (c), (d) or (e) of paragraph
(11) of subsection 9.02 of Rev. Proc. 2008-4, 2008-1 I.R.B.
121, or its successors. Where an authorized representative signs
the request or will appear before the Service in connection with the
request, a properly signed and dated Form 2848, Power
of Attorney and Declaration of Representative, must be
submitted with the request.An individual is not an authorized representative
of the applicant merely on account of being the administrator or trustee
of the plan.

(2) The request also must contain a declaration in the following
form: “Under penalties of perjury, I declare that I have examined
this request, or this modification to the request, including accompanying
documents, and, to the best of my knowledge and belief, the request
or the modification contains all the relevant facts relating to the
request, and such facts are true, correct, and complete.” This
declaration must be signed by the applicant (e.g., an authorized officer of a corporation). The signature of an individual
with a power of attorney will not suffice for the declaration. See
paragraph (13) of subsection 9.02 of Rev. Proc. 2008-4.

(3) Because a request for the use of substitute mortality
tables constitutes a request for a ruling, compliance with § 6110
of the Code is also required. Section 601.201 of the Statement of
Procedural Rules sets forth the requirements applicable to requests
for rulings and determination letters which are subject to § 6110.
Section 601.201(e) furnishes specific instructions to applicants.

The applicant must provide with the request either a statement
of proposed deletions and the statutory basis for each proposed deletion,
or a statement that no information other than names, addresses, and
taxpayer identifying numbers need be deleted.

.04 Checklist. A checklist has been
provided in Appendix A, which must be signed and dated by the applicant
or authorized representative and placed on top of the request.

SECTION 4. DEADLINE FOR REQUESTING THE
USE OF SUBSTITUTE MORTALITY TABLES

.01 In General. A request for the
use of substitute mortality tables generally must be submitted at
least 7 months prior to the first day of the first plan year for which
the substitute mortality tables are to apply. Thus, for example,
if the first plan year to which substitute mortality tables are to
apply is the plan year that begins January 1, 2010, then the deadline
is June 1, 2009. Notwithstanding the generally applicable deadline,
a request to use substitute mortality tables for a plan year that
begins during 2009 is timely if it is submitted on or before October
1, 2008.

.02 Incomplete Requests. Generally,
an incomplete request for the use of substitute mortality tables will
be summarily denied absent mutual agreement of the Service and the
applicant to extend the 180-day period specified under § 430(h)(3)(C)(v)(II).
Except as provided in subsection 5.06 of this revenue procedure,
the applicant should not assume that the Service will agree to extend
the 180-day period for a request that does not include substantially
all of the applicable information specified in sections 5 through
13 of this revenue procedure.

SECTION 5. GENERAL RULES

.01 The Service will deny a request if the request fails
to meet the requirements of this revenue procedure or if the Service
determines that a substitute mortality table does not sufficiently
reflect the mortality experience of the applicable plan population.

.02 If separate mortality tables are used for disabled individuals
pursuant to § 430(h)(3)(D), then those individuals are disregarded
for all purposes under this revenue procedure.

.03 A separate request must be made with respect to each
plan (the “Plan”), or group of plans that are permissively
aggregated (the “Permissive Group”), for which the use
of a substitute mortality table or tables is requested. The request
must include a complete copy of the Base Tables that will form the
basis for the substitute mortality tables that will be used. The request
must state the first day of the first plan year for which the substitute
mortality tables are to be applicable (the “Requested Effective
Plan Year”) and must state the term of years (not more than
10) that the tables are requested to be used.

Each request also must identify the Base Year of the Base Tables.
Under § 1.430(h)(3)-2(c)(2)(iii), the base year is the
calendar year that contains the day before the midpoint of the Experience
Study Period. For example, if an Experience Study Period consists
of the 5-consecutive-year period beginning July 1, 2006, and ending
June 30, 2011, the midpoint of the Experience Study Period is January
1, 2009, and the Base Year is 2008. If the Experience Study Period
reflects different plan years for plans within the Permissive Group
as described in subsection 7.03, the midpoint is determined taking
into account the total number of years and months reflected in the
Experience Study Period.

.04 The request must include a description of the populations
within the Plan (or the Permissive Group) for which the use of substitute
mortality tables is requested and a description of the populations,
if any, for which the use of substitute mortality tables is not requested.

For example, if the use of substitute mortality tables is requested
for nondisabled female individuals (but for no other individuals)
where separate mortality tables are used for disabled individuals
pursuant to § 430(h)(3)(D), then the population for whom
the use of substitute mortality tables is requested would be described
as “Nondisabled Females” and the population for whom the
use of substitute mortality tables is not requested would be described
as “Nondisabled Males.”

Similarly, if the use of substitute mortality tables is requested
for male annuitants (but not male nonannuitants) and for females on
a combined annuitant/nonannuitant basis, in each case including disabled
individuals, then the populations for whom the use of substitute mortality
tables is requested would be described as “Male Annuitants”
and “Females,” and the population for whom the use of
substitute mortality tables is not requested would be described as
“Male Nonannuitants.”

.05 The request must include the plan identification information
described in Section 6, the credible mortality experience demonstrations
described in Section 7, the stability demonstrations described in
Section 8, the lack of credible mortality experience demonstrations
described in Section 9, the unadjusted mortality experience described
in Section 10, the Base Table construction methods as set forth in
Section 11 or 12, and the demonstrations with respect to the Base
Tables described in Section 13.

.06 If there are other plans subject to § 430
maintained by the applicant, or members of the applicant’s controlled
group, that have credible mortality experience for which the use of
substitute mortality tables will be requested in a separate request,
then the Service will not summarily deny the request for the use of
substitute mortality tables on the grounds that all plans with credible
mortality experience maintained by the applicant would not be using
substitute mortality tables, but only if the applicant requests that
the 180-day review period provided under § 430(h)(3)(C)(v)(II)
not begin for the initial request and any such separate request until
the date all such separate requests have been received, and only if
those separate requests are submitted within 90 days after the receipt
of the initial request (and no later than the deadline that applies
to each such separate request under section 4 of this revenue procedure).
In the absence of such a request for a delay in the start of the
180-day review period, or if all such separate requests are not submitted
within 90 days after the receipt of the initial request, the Service
will summarily deny the request for the use of substitute mortality
tables on the grounds that all plans with credible mortality experience
maintained by the applicant would not be using substitute mortality
tables.

Example. Employer E maintains Plans A and
B, both of which are calendar year plans that have each had over 2,500
deaths in each of the last five years. Employer E submits a request
for the use of substitute mortality tables for Plan A for the 2010
plan year that is received on February 15, 2009 (the “A Request”).
To avoid denial of the A Request on the grounds that all plans with
credible mortality experience maintained by the applicant would not
be using substitute mortality tables, Employer E requests that the
180-day review period of the A Request not begin until the receipt
of a separate request for the 2010 plan year from Employer E for the
use of substitute mortality tables by Plan B. The Service agrees
to defer commencement of the 180-day period, but will summarily deny
the application unless Employer E submits a separate request for the
use of substitute mortality tables for Plan B no later than May 15,
2009.

.07 If two or more plans are permissively aggregated for
the purpose of constructing substitute mortality tables, then such
plans are treated as a single plan for all purposes of this revenue
procedure. Accordingly, if two or more plans are permissively aggregated,
then all populations within the plans must be so aggregated.

Example. Employer F maintains Plans C,
D, and E, each of which had 500 male deaths and 100 female deaths
in each of the last five years. Employer F may request to use one
substitute male mortality table and one substitute female mortality
table for the aggregation of Plans C, D, and E. However, Employer
F may not aggregate Plans C, D, and E and request to use one substitute
female mortality table for Plans C, D, and E, and three separate substitute
male mortality tables for Plans C, D, and E.

SECTION 6. IDENTIFICATION OF PLANS

.01 The following plan information must be provided for the
Plan (or for each plan within the Permissive Group) for which the
use of substitute mortality tables is requested:

(1) Plan name;

(2) Plan number;

(3) Plan year (i.e., calendar, or if
fiscal, the first and last day);

(4) Employer identification number;

(5) Date of plan establishment; and

(6) Copies of the actuarial valuation reports for each plan
year which begins or ends during the Experience Study Period as defined
in section 7 of this revenue procedure.

.02 The following information must be provided for each
plan that is subject to § 430 maintained by the applicant,
or members of the applicant’s controlled group, for which the
use of substitute mortality tables is not requested:

(1) Plan name;

(2) Plan number;

(3) Plan year (i.e., calendar, or if
fiscal, the first and last day);

(4) Employer identification number;

(5) Date of plan establishment;

(6) If the plan is a newly affiliated plan under § 1.430(h)(3)-2(d)(1)(iii)(B),
the date of the merger, acquisition, or similar transaction described
in § 1.410(b)-2(f), and the last day of the plan year described
in § 1.430(h)(3)-2(d)(1)(iii)(A); and

(7) The Lack of Credible Mortality Experience Demonstration
Period, or, if the plan is not required to identify such a period,
the applicable exception. (See section 9 of this revenue procedure.)

.03 The following additional information must be provided
with respect to each plan that is subject to § 430 that
is maintained by the applicant, or member of the applicant’s
controlled group, that was spun off from another plan that is maintained
by the applicant within the five-year period preceding the date of
the request:

(1) The plan name and the plan number of the spun off plan,
and the plan name and number of the plan from which the spinoff occurred;

(2) The employer identification number of the employer maintaining
the spun off plan and the employer identification number of the employer
maintaining the plan from which the spinoff occurred;

(3) The date of the spinoff;

(4) The approximate number of individuals covered by the
spun off plan as of the date of the spinoff and the approximate number
of individuals covered by the plan from which the spinoff occurred,
prior to the spinoff; and

(5) The reason for the spinoff.

SECTION 7. DEMONSTRATIONS OF CREDIBLE
MORTALITY EXPERIENCE

.01 The applicant’s request must identify the period
of time covered by the mortality experience study (the “Experience
Study Period”) used to develop the Base Table(s) and must identify
the Base Year. Different Experience Study Periods for different populations
within a plan are not permitted. Except as provided in subsections
.02 and .03 of this section, different Experience Study Periods for
different plans within the Permissive Group are not permitted. Thus,
a plan that does not have mortality experience for the entire Experience
Study Period may not be included in the Permissive Group. Similarly,
a plan that was acquired subsequent to the first day of the Experience
Study Period may be included in the Permissive Group only if the applicant
includes mortality experience for the full Experience Study Period.
Thus, in such cases, the mortality experience study must include
mortality experience that occurred before the date of acquisition.

.02 A plan that came into existence by reason of a spinoff
from the Plan (or from a plan within the Permissive Group) during
the Experience Study Period may be included in the Permissive Group.
In such a case, the period of time covered by the mortality experience
study with respect to the spun off plan will begin as of the date
of the spinoff. However, the mortality experience of the individuals
covered by the spun off plan from the first day of the Experience
Study Period to the date of the spinoff would be included as part
of the experience of the single plan that existed before the spinoff.

.03 If separate plans within a Permissive Group have different
plan years, the Experience Study Period may consist of a combination
of different periods for analyzing the experience data for each plan,
provided that the period for each plan:

(1) is based on the plan year for that plan,

(2) consists of the same number of years,

(3) ends less than 3 years before the first day of the first
plan year for which the substitute mortality table is to apply for
any plan in the Permissive Group, and

(4) minimizes the total period of time covered by the overall
Experience Study Period by overlapping (to the greatest extent possible)
the periods used to analyze experience data for each plan in the Permissive
Group.

For example, consider a Permissive Group consisting of two plans,
Plan A with a calendar-year plan year and Plan B with a March 1-February
28 plan year, with experience data gathered by plan years for each
plan. If the plan sponsor submits a request to use substitute mortality
tables for the Permissive Group effective with the plan year beginning
January 1, 2009, for Plan A and March 1, 2009, for Plan B, the plan
sponsor may use an Experience Study Period ending as early as December
31, 2006, based on the first day of the plan year for Plan A. If
the plan sponsor wishes to use the approach provided in this subsection
.03 and uses a 4-year period ending on December 31, 2006, to analyze
the experience data for Plan A, the period used to analyze the experience
data for Plan B must be a 4-year period ending on February 28, 2007.
The Experience Study Period in this case would be the period beginning
January 1, 2003, and ending February 28, 2007.

.04 In order to demonstrate credible mortality experience,
the number of deaths during each year of the Experience Study Period
(and, in total, for the entire Experience Study Period) within each
population for which the use of substitute mortality tables is requested
must be provided in tabular form.

SECTION 8. DEMONSTRATION OF STABILITY

.01 The following information must be provided in tabular
form for each population within the Plan (or plans within the Permissive
Group) for which the use of a substitute mortality table is requested,
aggregating all plans that have the same plan year:

(1) The average number of individuals within the population
during the Experience Study Period; and

(2) The number of individuals within the population as of
the last day of the plan year immediately preceding the plan year
during which the use of substitute mortality tables is requested.

A reasonable estimate of the number of plan individuals, such
as the estimated number of participants and beneficiaries used for
purposes of PBGC Form 1-ES, may be used to provide the information
requested in paragraph (2) of this subsection 8.01.

.02 If the difference between paragraphs (1) and (2) of
subsection 8.01 within any population, for any plan year, reflects
a difference of 20 percent or more, then an analysis that shows that
the mortality experience during the Experience Study Period is still
accurately predictive of the future mortality of the population must
be submitted.

SECTION 9. DEMONSTRATIONS OF LACK OF
CREDIBLE MORTALITY EXPERIENCE

.01 General Rule. For all plans maintained
by the applicant, except as described in subsections .02 and .03 of
this section, the period of time used to demonstrate a lack of credible
mortality experience must be identified (the “Lack of Credible
Mortality Experience Demonstration Period”). This period must
consist of at least 4 consecutive years, with the last such year ending
less than 3 years before the first day of the plan year for which
lack of credible mortality experience is being demonstrated. However,
if the Experience Study Period used for the substitute mortality tables
for the Permissive Group is longer than 4 years, then the Lack of
Credible Mortality Experience Demonstration Period must include the
same number of years as the Experience Study Period and must end less
than 3 years before the first day of the plan year for which lack
of credible mortality experience is being demonstrated. See subsection
.06 of this section for rules that apply when the Experience Study
Period is a combination of different periods as described in subsection
7.03.

.02 General Exception. Plans described
in paragraph (1), (2), or (3) of this subsection 9.02 are not required
to identify a Lack of Credible Mortality Experience Demonstration
Period.

(1) Plans for which the use of substitute mortality tables is
requested for all populations (other than disabled populations for
whom the tables prescribed under § 430(h)(3)(D) are used);

(2) Plans for which the use of substitute mortality tables has
previously been approved by the Service and the term of years of such
approval ends subsequent to the last day of the Requested Effective
Plan Year; and

(3) Newly affiliated plans for which the last day of the plan
year described in § 1.430(h)(3)-2(d)(1)(iii)(A) is a date
on or after the first day of the plan year for which the use of substitute
mortality tables is requested.

.03 Exception for Certain Newly Affiliated Plans. Newly affiliated plans (as defined in § 1.430(h)(3)-2(d)(1)(iii)(B))
for which the last day of the plan year described in § 1.430(h)(3)-2(d)(1)(iii)(A)
is a date prior to the first day of the plan year for which the use
of substitute mortality tables is requested, and for which the applicant
has elected not to include mortality experience prior to the date
of the acquisition, may identify a Lack of Credible Mortality Experience
Demonstration Period consisting of fewer years than otherwise required
under subsection .01 of this section. For such plans, the Lack of
Credible Mortality Experience Demonstration Period must begin no later
than the date the plan became newly affiliated and end not more than
one year and one day before the first day of the plan year for which
the use of substitute mortality tables is requested.

.04 Demonstration of Plan-Wide Lack of Credible
Mortality Experience. The following information must be
provided in tabular form for each plan that is not within the Permissive
Group and which does not fall within one of the exceptions provided
in subsection .02 of this section:

(1) The number of male deaths during the Lack of Credible
Mortality Experience Demonstration Period; and

(2) The number of female deaths during the Lack of Credible
Mortality Experience Demonstration Period.

.05 Demonstration of Lack of Credible Mortality
Experience for Certain Populations. The number of male
and female deaths during the Lack of Credible Mortality Experience
Demonstration Period must be provided in tabular form for each relevant
population within the Plan (or plans within the Permissive Group)
for which the use of substitute mortality tables is not requested.

The relevant populations for this purpose would, for example,
be nondisabled females if the request was to use a substitute mortality
table for nondisabled males (but for no other individuals) where separate
mortality tables were used for disabled individuals pursuant to § 430(h)(3)(D).
Similarly, the relevant populations would be male nonannuitants and
females, in each case including disabled individuals, if the request
was to use a substitute mortality table for male annuitants (but not
for male nonannuitants) where separate mortality tables were not used
for disabled individuals pursuant to § 430(h)(3)(D).

.06 Application when Experience Study Period is
a Combination of Different Periods as Described in Subsection 7.03. For plans or populations within a Permissive Group, if the Experience
Study Period covers a period of more than 4 years because it consists
of a combination of 4-year (or longer) periods for analyzing the experience
data for individual plans included in the Permissive Group, the Lack
of Credible Mortality Experience Demonstration Period must also consist
of a combination of 4-year periods for each plan (or such longer periods
as used for the Experience Study Period), subject to the same constraints
as in subsection 7.03.

For example, the Permissive Group illustrated in subsection
7.03 used an Experience Study Period consisting of 4 years based
on the plan year for Plan A and 4 years based on the plan year of
Plan B (for an overall Experience Study Period of 4 years and 2 months).
Therefore, lack of credible mortality experience must be demonstrated
for any populations within that Permissive Group for which substitute
mortality tables are not requested, on the basis of a Lack of Credible
Mortality Experience Demonstration Period covering a 4-year period
corresponding to the plan year for the plan covering the population
(for an overall Lack of Credible Mortality Experience Demonstration
Period of 4 years and 2 months). Accordingly, for demonstrations
applying to plan years beginning in 2011, the Lack of Credible Mortality
Experience Demonstration Period could either be based on 4-year periods
ending December 31, 2008, for populations covered under Plan A and
February 28, 2009, for populations covered under Plan B, or on 4-year
periods ending December 31, 2009, for populations covered under Plan
A and February 28, 2010, for populations covered under Plan B.

However, if the overall Experience Study Period is less than
4 years in length, or if the population or plan for which lack of
credibility experience is being demonstrated is not in the Permissive
Group, then the general rule of subsection .01 of this section is
applied based on the number of years of data used for each plan in
the Permissive Group. For example, if the periods used to analyze
experience data for Plans A and B were only 2 years in length, the
Lack of Credible Mortality Experience Demonstration Period for any
plans or populations within the Permissive Group could either be a
period of 4 years (with both plans using the same period of time to
analyze experience data) or 4 years and 2 months (using 4-year periods
corresponding to the plan year for each plan to analyze the experience
data). In either case, the Lack of Credible Mortality Experience
Demonstration Period must end less than 3 years before the first day
of any plan year for which lack of credible mortality experience is
being demonstrated.

.07 Alternative Demonstrations of Lack of Credible
Mortality Experience. In lieu of the information described
in subsections .04 through .06 of this section, lack of credible mortality
experience may be demonstrated by providing alternative information
if such information demonstrates to the satisfaction of the Commissioner
that the number of male and/or female deaths would not exceed 1,000
during the Lack of Credible Mortality Experience Demonstration Period.
For example, a year-by-year reconciliation of the participant population
(such as might be shown in an actuarial valuation report) could be
submitted showing that the total number of participants leaving the
plan during the Lack of Credible Mortality Experience Demonstration
Period is less than 1,000, as this would clearly show that the number
of male and female deaths must also be less than 1,000 during that
period. Similarly, if the total number of participants in the plan
does not exceed 1,000 for any year during the Lack of Credible Mortality
Experience Demonstration Period, the year-by-year number of participants
in the plan during such period could be submitted in lieu of the information
described in subsections .04 through .06 of this section, as this
would indicate that it would be highly unlikely that the total number
of deaths during that period would exceed 1,000.

SECTION 10. UNADJUSTED MORTALITY EXPERIENCE

.01 In General. The information below
must be provided in tabular form for all individuals within each population
for whom the use of a separate mortality table is requested, for each
year of the Experience Study Period, and for the Experience Study
Period in its entirety, for all ages between 18 and 100 (except as
provided in subsection .03 of this section). The same Experience
Study Period must be used to develop the information below as was
used to demonstrate credible mortality experience in section 7.

(1) The sum of the accrued benefits (or payable benefits,
in the case of individuals in pay status) of all individuals at that
age at the beginning of the year, other than individuals who left
the population during the year for reasons other than death;

(2) The sum of the accrued (or payable) benefits of all
individuals at that age at the beginning of the year who left the
population during the year for reasons other than death, adjusted
to reflect exposure periods of less than one year;

(3) The sum of the accrued (or payable) benefits of all
individuals at that age at the beginning of the year who died during
the year;

(4) The quotient determined by dividing the sum of the accrued
(or payable) benefits of all individuals at that age who died during
the year by the sum of the accrued (or payable) benefits for all individuals
at that age adjusted for individuals at that age who left the population
for reasons other than death (i.e., the amount
determined in paragraph (3), divided by the total of the amounts determined
in paragraphs (1) and (2);

(5) The total number of individuals at that age at the beginning
of the year;

(6) The total number of individuals at that age at the
beginning of the year who left the population for reasons other than
death;

(7) The total number of individuals at that age at the beginning
of the year who died during the year; and

(8) The average accrued benefit of all individuals at that
age at the beginning of the year.

.02 Adjustment for Exposure Periods of Less than
One Year. The request must include a description of the
method(s) used to adjust the accrued benefits of individuals who left
for reasons other than death to reflect exposure periods of less than
one year.

.03 Grouping of Ages. The information
requested in subsection .01 of this section may be presented in five-year
age groups. In such cases, the groups at the extreme ages may include
more than five ages provided such groups either do not include ages
greater than age 24 or do not include ages less than age 95. Thus,
for example, an age group consisting of all ages 24 and lower would
be permissible whereas an age group consisting of all ages 25 and
lower would not be permissible.

.04 Unadjusted Base Tables. An Unadjusted
Base Table for each population for which the use of substitute mortality
tables is requested shall, for all ages or all groups of ages, consist
of the quotients determined in paragraph (4) of subsection .01 of
this section for the Experience Study Period in its entirety. The
request must include a complete copy of each such Unadjusted Base
Table.

SECTION 11. BASE TABLE CONSTRUCTION
- GENERAL METHOD

.01 In General. Except as otherwise
provided in section 12 of this revenue procedure, a Base Table for
a population must be created from the Unadjusted Base Table for the
population through the application of a graduation method generally
used by the actuarial profession in the United States (e.g., Whittaker-Henderson Type B, Karup-King). Section 12 of this revenue
procedure provides for an alternate method of constructing a Base
Table through the application of a fixed percentage to the mortality
rates of a Standard Mortality Table, projected to the Base Year.

.02 Information Regarding Graduation Methods. The graduation method must be identified and the parameters of
the graduation method used must be specified (e.g., for Whittaker-Henderson Type B, the number of differences and the
“h” value must be specified). If more than one graduation
is performed, then the parameters must be specified for each such
graduation.

.03 Intermediate Values. If more than
one graduation is performed in the process of adjusting an Unadjusted
Base Table to a Base Table, then a copy of each intermediate table
so created must be provided.

.04 Rationale. The rationale for the
selection of each particular graduation method used must be provided
along with the rationale for the selection of the particular parameters
used as part of the method.

.05 Extension to Extreme Ages. At
extreme ages for which insufficient data exists, the Base Tables must
be extended to blend into the applicable Standard Mortality Table,
provided in subsection .06 of this section, projected to the Base
Year using Projection Scale AA, as set forth in the regulations.
In such cases, the method (and the rationale for the method) used
for the extension must be described.

.06 Standard Mortality Tables. For
purposes of this revenue procedure, the following are the Standard
Mortality Tables:

.07 Gender-Specific Base (Year 2000) Mortality
Combined Tables. For purposes of this revenue procedure,
the Male Base Combined Mortality Table (Year 2000) is the table determined
through application of the male Weighting Factors for Small Plans
(the “Weights”) to the Male Base Nonannuitant and Annuitant
Mortality Tables (Year 2000) as set forth in § 1.430(h)(3)-1.
Similarly, the Female Base Combined Mortality Table (Year 2000)
is the table determined through application of the female Weights
to the Female Base Nonannuitant and Annuitant Mortality Tables (Year
2000) as set forth in § 1.430(h)(3)-1.

SECTION 12. BASE TABLE CONSTRUCTION
- ALTERNATE METHOD

.01 General Rule. A Base Table for
a population may be created by applying a fixed percentage (the “Fixed
Percentage”) to the mortality rates in the Projected Applicable
Standard Mortality Table only if the requirements of subsections .02
and .03 of this section are satisfied and the Service determines that
the resulting Base Table sufficiently reflects the mortality experience
of the applicable plan population. For this purpose the Projected
Applicable Standard Mortality Table is the applicable Standard Mortality
Table, projected to the Base Year using Projection Scale AA, as set
forth in § 1.430(h)(3)-1. See subsection .05 of this section
with regard to the possible use of other mortality tables for this
purpose.

Under this section 12, the Unadjusted Base Mortality Tables
must be constructed using five-year age groups. For each Base Table
constructed using the alternate method described in this section,
the Fixed Percentage and the mortality table to which such percentage
is to be applied must be identified. In addition, for each so constructed
Base Table, the ratios of the mortality rates from the Unadjusted
Base Mortality Table for the population to the central age mortality
rates (i.e., the mortality rates for the ages
that are the midpoints of the age ranges) from the Projected Applicable
Standard Mortality Table must be provided, in tabular form, for all
five-year age groups for which mortality experience is available.

.02 Selection of the Fixed Percentage.

(1) If the applicable Standard Mortality Table for a population
is the table provided in either paragraph (1) or paragraph (3) of
subsection 11.06, then the Fixed Percentage must be within two percentage
points of the arithmetic average of the ratios of the mortality rates
from the Unadjusted Base Mortality Table for the population to the
central age mortality rates from the Projected Applicable Standard
Mortality Table of each of the five-year age groups from the 35-39
age group to the 60-64 age group, inclusive, unless the applicant
can demonstrate that a different set of five-year age groups (consisting
of no less than six such groups) is more appropriate for this purpose.

(2) If the applicable Standard Mortality Table for a population
is the table provided in either paragraph (2) or paragraph (4) of
subsection 11.06, then the Fixed Percentage must be within two percentage
points of the arithmetic average of the ratios of the mortality rates
from the Unadjusted Base Mortality Table for the population to the
central age mortality rates from the Projected Applicable Standard
Mortality Table of each of the five-year age groups from the 55-59
age group to the 80-84 age group, inclusive, unless the applicant
can demonstrate that a different set of five-year age groups (consisting
of no less than six such groups) is more appropriate for this purpose.

(3) If the applicable Standard Mortality Table for a population
is the table provided in either paragraph (5) or paragraph (6) of
subsection 11.06, then the Fixed Percentage must be within two percentage
points of the arithmetic average of the ratios of the mortality rates
from the Unadjusted Base Mortality Table for the population to the
central age mortality rates from the Projected Applicable Standard
Mortality Table of each of the five-year age groups from the 45-49
age group to the 80-84 age group, inclusive, unless the applicant
can demonstrate that a different set of five-year age groups (consisting
of no less than eight such groups) is more appropriate for this purpose.

.03 Consistency Requirement. The consistency
requirement of this subsection .03 is satisfied only if each of the
applicable ratios described in subsection .02 of this section is within
10 percentage points of the Fixed Percentage.

.04 Terminal Age. Notwithstanding subsection
.01 of this section, the mortality rate for the terminal age in any
Base Table created by applying a Level Percentage to a Standard Mortality
Table shall be 1.000.

.05 Other Mortality Tables. The Service
will consider requests for the approval of Base Tables constructed
through the application of a fixed percentage to the mortality rates
of other published generally accepted mortality tables (e.g., the 1983 Group Annuity Mortality Table) using standards
similar to those provided in subsections .01 through .04 of this section.

.06 Example. The age group rates from
the Male Unadjusted Base Table (determined in accordance with section
10 of this revenue procedure), the central age rates from the Male
Base Combined Mortality Table (Year 2000), projected to the Base
Year, and the ratios of such rates are as follows:

In accordance with subsection .02 of this section, the Fixed
Percentage to be applied to the Male Base Mortality Table (Year 2000),
projected to the Base Year, must be between 92.77% and 96.77%. However,
a Fixed Percentage that is less than 94.18% would fail to satisfy
the requirements of subsection .03 of this section because the ratio
for the 65-69 Age Group (i.e., 104.18%) would
then not be within 10 percentage points of a Fixed Percentage less
than 94.18%. Similarly, a Fixed Percentage that is greater than 95.89%
would fail the requirements of subsection .03 because the ratio for
the 75-79 Age Group (i.e., 85.89%) would then
not be within 10 percentage points of a Fixed Percentage greater than
95.89%. Accordingly, under the facts in this example, if the applicant
were to request the use of a Base Table constructed through the application
of a percentage to the Male Base Mortality Table (Year 2000) that
is a fixed integer, the applicant would be limited to a Fixed Percentage
of 95%.

SECTION 13. DEMONSTRATIONS WITH RESPECT
TO BASE TABLES

The following information must be provided with respect to each
population for which the use of substitute mortality tables is requested:

.01 Generational Mortality Tables.
Sample generational mortality tables, as of the Requested Effective
Plan Year, for individuals whose years of birth are 1940, 1950, and
1960, constructed from the Base Tables using a methodology in accordance
with § 1.430(h)(3)-1 (except that the projection period
used to determine each particular mortality improvement factor is
the number of years between the Base Year and the year for which the
probability of death is determined).

.02 Funding Target Comparisons. The liability of the plan(s) for which the use of substitute
mortality tables is requested as of the valuation date for a plan
year ending no earlier than one year and one day before the first
plan year to which the substitute mortality tables will apply (the
“Comparison Year”). The liability is to be measured
using generational mortality tables determined in accordance with
the methodology described in subsection .01 of this section. The
liability is to be provided separately for active participants, terminated
vested participants, and retirees and beneficiaries in pay status,
and is to be determined as follows:

(1) For Comparison Years beginning in 2007, the liability
to be reported is the Current Liability determined in accordance with
§ 412(l) as it existed prior to PPA ’06 and, for comparison,
what the Current Liability would have been if the substitute mortality
table(s) had been used to determine Current Liability, holding all
other assumptions constant.

(2) For Comparison Years beginning after 2007, the liability
to be reported is the Funding Target, determined without regard to
at-risk assumptions under § 430(i), and, for comparison,
what the Funding Target would have been if the substitute mortality
table(s) had been used to determine the Funding Target, holding all
other assumptions constant.

.03 Annuity Factors. The following
annuity factors based on generational mortality tables for individuals
whose year of birth is 20 years before the Base Year, determined using
interest and mortality assumptions consistent with those used under
subsection .02 of this section.

(1) For all Base Tables with the exception of annuitant
Base Tables, deferred to age 55 factors at quinquennial ages from
20 to 50.

(2) For all Base Tables with the exception of nonannuitant
Base Tables, immediate annuity factors at quinquennial ages from 50
to 90.

.04 Graphical Displays. A comparison
in the form of graphs with the X-axis representing age and the Y-axis
representing the mortality rate, for each of the following pairs of
mortality rates, for each population for which the use of substitute
mortality tables is requested:

(1) The mortality rates from the Base Unadjusted Mortality Table
and the mortality rates from the proposed Base Table; and

(2) The mortality rates from the proposed Base Table and from
the applicable Standard Mortality Table (as described in subsection
11.06 of this revenue procedure), projected to the Base Year.

SECTION 14. EFFECTIVE DATE

This revenue procedure is effective for all requests for the
use of plan-specific substitute mortality tables in accordance with
§ 430(h)(3)(C) of the Code and § 303(h)(3)(C)
of ERISA submitted on or after December 1, 2008. Requests submitted
prior to December 1, 2008, may rely on this revenue procedure or Rev.
Proc. 2007-37.

SECTION 15. PAPERWORK REDUCTION
ACT

The collection of information contained in this revenue procedure
has been reviewed and approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act (44 U.S.C. section 3507)
under control number 1545-2073.

An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid OMB control number.

The collection of information in this revenue procedure is in
sections 3 through 13. This collection of information is required
to evaluate, process and obtain approval of the request for the use
of substitute mortality tables. This information will be used to
make determinations under § 430(h)(3) of the Code. The
likely respondents are businesses or other for-profit institutions
and nonprofit institutions.

The estimated total annual reporting/recordkeeping burden is
25,400 hours.

The estimated annual burden per respondent/recordkeeper varies
from 335 to 681 hours, depending on individual circumstances, with
an estimated average burden of 508 hours. The estimated annual number
of respondents/recordkeepers is 50.

The estimated annual frequency of responses is once every 10
years.

Books or records relating to a collection of information must
be retained as long as their contents may become material in the administration
of any internal revenue law. Generally, tax returns and tax return
information are confidential, as required by 26 U.S.C. section 6103.

DRAFTING INFORMATION

The principal author of this revenue procedure is Carolyn E.
Zimmerman of the Employee Plans, Tax Exempt and Government Entities
Division. For further information regarding this revenue procedure,
please contact Ms. Zimmerman at retirementplanquestions@irs.gov.

Appendix A

REQUEST FOR THE USE OF SUBSTITUTE MORTALITY TABLES CHECKLIST IS YOUR
SUBMISSION COMPLETE?

Instructions

The Service will
be able to respond more quickly to your request for the use of substitute
mortality tables if it is carefully prepared and complete. To ensure
your request is in order, use this checklist. Answer each question
in the checklist by indicating Y for yes, N for no, or N/A for not
applicable. Explanations must be provided for N or N/A responses.
Sign and date the checklist (as
taxpayer or authorized representative) and place it on top of your
request.

You must submit
a completed copy of this checklist with your request. If a completed
checklist is not submitted with your request or if explanations are
not provided for N and N/A responses, then your submission will be
considered incomplete for purposes of determining the first day of
the 180-day period described in § 430(h)(3)(C)(v)(II) of
the Code.

1.

If you want to designate an authorized representative, have
you included a properly executed Form 2848 (Power of Attorney
and Declaration of Representative)?

2.

Have you satisfied all the requirements of Rev. Proc. 2008-4
or its successors (especially concerning signatures and penalties
of perjury statement)? (See paragraphs (1) and (2) of subsection 3.03)

3.

Have you included a statement of proposed deletions? (See paragraph
(3) of subsection 3.03)

4.

Have you included the user fee required under Rev. Proc. 2008-8
or its successors? (See subsection 3.02)

5.

Have you included a copy of the Base Tables which will form
the basis for the substitute mortality tables whose use is requested?
(See subsection 5.03)

6.

Have you identified the first day of the first plan year for
which the use of substitute mortality tables is requested? (See subsection
5.03)

7.

Have you stated the number of years for which the use of substitute
mortality tables is requested? (See subsection 5.03)

8.

Have you identified the Base Year of the Base Tables? (See
subsection 5.03)

9.

Have you included a description of the populations for which
the use of substitute mortality tables is requested? (See subsection
5.04)

10.

Have you included a description of the populations for which
the use of substitute mortality tables is not requested? (See subsection
5.04)

11.

Have you requested that the 180-day review period not begin
until a separate request is received for another plan(s) maintained
by the applicant is received? (See subsection 5.06)

12.

Have you identified all plans subject to § 430 maintained
by the applicant, or members of the applicant’s controlled group,
including the additional information required for spun-off plans under
subsection 6.03? (See section 6)

13.

Have you identified the Experience Study Period for each plan
in the Permissive Group? (See subsections 7.01 through 7.03)

14.

Have you included a table showing the number of deaths, for
each applicable population within the Plan (or within the Permissive
Group), for each year (and in total) of the Experience Study Period?
(See subsection 7.04)

15.

Have you included a table showing the average number of individuals
during the Experience Study Period and the number of individuals within
the population as of the last day of the plan year immediately preceding
the plan year during which the use of substitute mortality tables
is requested for each population within the Plan (or plans within
the Permissive Group) for which the use of a substitute mortality
table is requested? (See section 8)

16.

Have you included a table for each plan that is not within
the Permissive Group showing the number of male and female deaths
during the plan’s Lack of Credible Mortality Experience Demonstration
Period, including identification of the Lack of Credible Mortality
Experience Demonstration Period? (See subsections 9.01, 9.04, and
9.06.) Alternatively, have you provided other information that demonstrates
that the number of deaths during the Lack of Credible Mortality Experience
Demonstration Period would not exceed 1,000? (See subsection 9.07)

17.

Have you included a table for each population within the Plan
(or plans within the Permissive Group) for which the use of substitute
mortality tables is not requested, showing the number of deaths within
the population? (See subsections 9.01, 9.05, and 9.06) Alternatively,
have you provided other information that demonstrates that the number
of deaths during the Lack of Credible Mortality Experience Demonstration
Period would not exceed 1,000? (See subsection 9.07)

18.

Have you included a table showing the accrued benefits, counts
of individuals covered under the plan, and other information for all
ages (or groups of ages) for each year (and in total) of the Experience
Study Period? (See subsection 10.01)

19.

Have you included a description of the method(s) used to adjust
the accrued benefits of individuals who left for reasons other than
death? (See subsection 10.02)

20.

Have you included complete copies of each Unadjusted Base Table?
(See subsection 10.04)

21.

Have you identified the graduation method(s) used to create
the Base Table(s) from the Unadjusted Base Table(s), along with any
intermediate tables resulting from applying the graduation method(s)?
(See subsections 11.02 and 11.03)

22.

Have you provided the rationale(s) for use of the particular
graduation method(s) selected? (See subsection 11.04)

23.

Have you described the method used to extend the Base Tables
to extreme ages? (See subsection 11.05)

24.

Have you identified a Fixed Percentage and a mortality table
associated with all Base Tables constructed using the alternate method
provided in section 12? (See subsection 12.01)

25.

Have you included a table showing the ratios of the mortality
rates from the Unadjusted Base Mortality Table to the central age
mortality rates from the Projected Applicable Standard Mortality Table
for each Base Table constructed using the alternate method of section
12? (See subsection 12.01)

26.

Have you included (three) sample generational mortality tables
as of the Requested Effective Plan Year? (See subsection 13.01)

27.

Have you included a comparison of hypothetical funding targets
determined using standard mortality tables and generational tables
developed from the proposed Base Tables? (See subsection 13.02)

28.

Have you included annuity factors for each Base Table, based
on generational mortality tables for individuals whose year of birth
is 20 years before the applicable Base Year? (See subsection 13.03)

29.

Have you included graphical displays of the rates from the
Base Unadjusted Mortality Tables, the proposed Base Tables, and the
applicable Standard Mortality Tables? (See subsection 13.04)